Lynas Rare Earths vs Mineral Resources shares: Which mining stock has more upside?
Investors looking at Australia’s mining sector might find themselves weighing Lynas Rare Earths Ltd (ASX: LYC) against Mineral Resources Ltd (ASX: MIN). Both are heavyweights with exposure to crucial elements for the green energy transition, but their businesses, financial metrics, and risk/reward profiles differ sharply. Here’s how these two ASX mining stocks stack up if you’re hunting for upside potential.
The case for Lynas Rare Earths
Lynas Rare Earths is a globally significant player in a highly specialised fieldârare earth elements. As one of the few producers outside China, Lynas mines and processes rare earths primarily at its Mt Weld site in Western Australia and its Malaysian facilities. These critical materials are fundamental for tech like electric vehicles, wind turbines, and other green energy gear. As noted in its latest public snapshot, Lynas is also pushing forward with rare earths supply chain projects in the US, highlighting its growth ambitions and strategic value.
Looking at Lynas’s fundamentals, a few points stand out:
- Market cap: $14.48 billion, making it the larger of these two miners
- P/E ratio: 66.50, signalling high expectations from the market
- Year to date return: 17.93%, a solid gain for 2026 so far
However, Lynas currently pays no dividend, so it’s a pure growth play at present.
The case for Mineral Resources
Mineral Resources offers something differentâa diversified mining and mining services business with major exposure to iron ore and lithium. The company not only operates its own mines but also delivers end-to-end mining services across WA and beyond. Its strategy is to build scale and efficiencies, aiming to become a top-five lithium hydroxide producer while supplying iron ore to global markets. As per its company overview, Mineral Resources also has a vertically integrated battery manufacturing ambition, leveraging both resource extraction and downstream processing.
Mineral Resources shows strong credentials on several financial fronts:
- P/E ratio: 10.25, much lower than Lynas’s
- Earnings per share (EPS): 5.338
- Dividend yield: 1.52%, fully franked (100%), so investors get tax-effective income
- Market cap: $10.76 billion
- Year to date return: 2.19%
The company’s dividend history is impressive, with a record of consistent, fully franked payouts spanning more than a decadeâsomething income-focused investors might really value.
Valuation comparison
The numbers tell a story of two very differently positioned miners:
| Lynas Rare Earths | Mineral Resources | |
|---|---|---|
| Market Cap | $14.48b | $10.76b |
| P/E Ratio | 66.50 | 10.25 |
| Earnings per Share | 0.221 | 5.338 |
| Dividend Yield | 0.00% | 1.52% (100% franked) |
Lynas’s earnings multiple is more than six times that of Mineral Resources, which suggests the market is pricing in much higher growth or scarcity value for rare earths. Note: Lynas Rare Earths’ reported P/E ratio may be based on a different earnings measure (e.g. underlying or forward earnings) than the EPS figure shown, which is why they may appear inconsistent.
Mineral Resources, by contrast, is trading on a low double-digit earnings multiple and generating sizeable franked dividends for shareholders. This could indicate the stock is valued more on its current earnings power and less on blue-sky potential.
Recent share price performance
Comparing their recent share price action up to 24 September 2026:
- Lynas Rare Earths closed at $14.39 on 24 September 2026, with a year-to-date return of 17.9%. Over the past month, the shares have seen some volatility, swinging between $13.83 and $16.40, but have generally traded higher from their mid-year levels.
- Mineral Resources finished at $54.18 on 24 September 2026, with a year-to-date return of 2.2%. The shares have been more subdued lately, moving between $52.83 and $65.46 during the month, but trending flat to slightly down over this timespan.
Which is the better buy?
If I’m weighing Lynas Rare Earths against Mineral Resources with upside in mind, my pick would be Lynas Rare Earths. The market is clearly pricing in strong long-term growth as rare earths play a bigger part in electric vehicle and renewable supply chains. While its high P/E means it’s priced for a lot of future successâand it doesn’t pay a dividendâthe company is uniquely placed outside of China and has achieved momentum this year.
Mineral Resources is no slouch, with a solid (and fully franked) dividend and much lower valuation. It’s arguably the steadier play, especially for those seeking income or concerned about volatile commodity cycles. But for investors squarely focused on capital growth and long-term thematic tailwinds, I’d lean toward Lynas despite the market optimism already baked in.
The post Lynas Rare Earths vs Mineral Resources: Which ASX mining stock shines? appeared first on The Motley Fool Australia.
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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.
